For most people their house is their biggest expense. OneRoof's Need to Know series looks at the ways home-owners can reduce the amount they are paying.
Some properties in the city are selling between $50,000 to $100,000 more than vendors' expectations.
The news comes as a report reveals all Rotorua houses have sold above their original purchase prices in the last three months as the market reaches record highs.
Rotorua real estate agents say propertieswere attracting multiple offers and fierce competition with many people prepared to pay well above what vendors had anticipated.
CoreLogic's latest Pain and Gain report showed Rotorua residents who sold their home in the third quarter of 2020 made a median profit of $248,500 per property.
The city's gross profit from resales between July 1 and September 30 was $50,636,112.
There were no sales made below the original purchase price.
CoreLogic senior property economist Kelvin Davidson said nationally and in Bay of Plenty, listings were still tight, demand from investors and first-home buyers was strong, which pushed up prices.
"The upshot is that anybody who had held their property for a number of years is almost guaranteed to sell for more than what they paid.
"I can't see these trends turning around to any great degree in the short term either, so I'd expect 'gain' to stay pretty strong in our next report (covering Q4), and also into 2021."
Professionals McDowell Real Estate co-owner Steve Lovegrove said nearly every property they were selling was by auction or multiple offer.
Lovegrove said a home's value was now determined not by what the buyer was prepared to pay but the maximum capacity of what the buyer could afford.
Professionals McDowell Real Estate co-owner Steve Lovegrove. Photo / File
"Properties are selling to the capacity that buyers can afford to pay," he said.
"They are in a forced position to pay the capacity of their budget."
Harcourts Rotorua sales manager Colville Barbour said the city's housing market had experienced significant growth, especially since lockdown, and they were seeing a lot of properties attract multiple offers.
"Under this competitive environment, we have seen in some instances, prices exceed asking price and vendor expectation.
"Recently at auction, a home sold approximately $100,000 above vendor expectation.
"The market continues to be bullish with strong buyer inquiry and a shortage of stock."
OneRoof editor Owen Vaughan. Photo / File
OneRoof editor Owen Vaughan said a lot of the gain people had seen on their homes would have come from a post-Covid period.
"These extra dollars are coming from a heated market," he said.
"That's evident in the Rotorua market, which has picked up speed and has been supercharged like Tauranga in the last couple of months.
Vaughan said Tauranga and Rotorua had seen a record few months and "it's going to get hotter".
"Buyers are having to stretch themselves ... they are having to make the best offer that's out there. They don't want to lose out."
Tremains Rotorua sales manager Megan Davies said if a valuation was completed in 2017, a minimum 30 per cent increase was expected.
"Generally now we see 40 per cent, which just reflects the standard annual increase."
However, she said auctions did see higher prices being paid.
"Because once in the auction room, the buyer gets social justification that someone else is bidding up so they are confident they are not paying too much.
"Clever and compulsive marketing will achieve competition so auction or deadline can be equally efficient to bring higher prices out."
Davies said the property market was a source of Fomo (fear of missing out) for some and people were keen to buy before prices escalated further or bank rates increased.
"The current trend is, I feel still an adjustment as Rotorua hasn't seen massive growth but just steady inline of 10 per cent year-on-year, so the 'profit' is being realised on previously low values."
Davies said a lack of stock affected the market together with a fear that if people didn't buy now the prices would be higher in the New Year, or interest rates may rise.
First National principal and Rotorua Real Estate Institute of New Zealand spokeswoman, Ann Crossley. Photo / File
First National principal and Rotorua Real Estate Institute of New Zealand spokeswoman Ann Crossley said almost all property was selling above expectation.
Crossley said a home was sold this week for about $50,000 above the property appraisal.
"There's more pressure at the moment because there's less stock."
But she said it depended on the price the property went to market for.
"For example, we priced a home for about $449,000 and it had no inquiry so we got the price down to $399,000 and it got multi offers and sold for above $400,000."
Rotorua's biggest gains
69 Elizabeth St Sold: September 9 Last sale price: $1,305,000 Previous sale price: $120,000 Price difference: $1,185,000 Years between: 39
6 Benn Rd Sold: September 17 Last sale price: $1,510,000 Previous sale price: $349,000 Price difference: $1,161,000 Years between: 15
168 Kawaha Point Rd Sold: September 16 Last sale price: $1,055,000 Previous sale price: $258,000 Price difference: $797,000 Years between: 18
60 Acacia Rd Sold: September 7 Last sale price: $1,200,000 Previous sale price: $500,000 Price difference: $700,000 Years between: 12
57 Summit Rd Sold: September 5 Last sale price: $920,000 Previous sale price: $222,250 Price difference: $697,750 Years between: 24
